Q: About a year ago our 18-month-old had a liver transplant. We worry he won’t be eligible for life insurance when he’s older and are considering a whole life policy for him while he’s young. Is this wise?
—Jenny Reid, Fredericton, NB
A: The first thing you need to do is ask your insurance provider about your son’s eligibility for life insurance when he is an adult. This may save you a lot of work and a lot of worry. Aline Baker of Rogers Insurance in Calgary says that “depending on the circumstances of the child’s medical history, he may very well be eligible for coverage.” If, however, you’re concerned that he won’t get coverage due to medical exclusions, you could opt for a whole life policy that allows you to increase the coverage without future medical evidence. Baker explains that “the child would have a small amount of whole life coverage now, but he will be able to access the cash value of these policies when he is older to offset things like education expenses, a down payment on a home or to provide retirement income.” Keep in mind that whole life policies provide flexibility, but at a price. Depending on your investment knowledge, you might be better off investing the money in an RESP for your son, instead of paying insurance premiums.